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Trade Blocs: Relevant for Africa?

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  • Jan Willem Gunning

Abstract

African trade blocs are largely pursued for political reasons. The economic effects are dubious: a bloc may well reduce the welfare of its members, particularly if the rest of the world is the marginal supplier. Even if the bloc raises aggregate welfare it is likely to be problematic, leading to a divergence of income levels with the poorer members of the bloc losing. Far from promoting regional trust and cooperation the bloc can then cause tensions between the member countries. An important positive effect is improved product variety. This makes the adjustment of the production structure less painful than is commonly assumed. In Africa there has seldom been clarity on the objectives of preferential trading arrangements. This matters since many objectives (scale and competition effects, improved variety and regional cooperation on infrastructure projects) do not require the formation of a trade bloc. If a trade bloc is set up for political reasons (e.g. to improve security) then it is desirable that it unilaterally lowers external tariffs so as to reduce trade diversion and income divergence.

Suggested Citation

  • Jan Willem Gunning, 2001. "Trade Blocs: Relevant for Africa?," Journal of African Economies, Centre for the Study of African Economies, vol. 10(3), pages 311-335.
    • Handle: RePEc:oup:jafrec:v:10:y:2001:i:3:p:311-335.
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    File URL: http://hdl.handle.net/10.1093/jae/10.3.311
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    Cited by:

    1. Céline CARRERE, 2003. "African Regional Agreements: Their Impact on Trade With or Without Currency Unions," Working Papers 200311, CERDI.
    2. Laurent Didier, 2015. "Accord tripartite de libre-échange COMESA-SADC-CAE," Post-Print hal-03546546, HAL.
    3. Sylvanus Kwaku Afesorgbor & Peter A. G. Bergeijk, 2014. "Measuring Multi-Membership in Economic Integration and Its Trade Impact: A Comparative Study of ECOWAS and SADC," South African Journal of Economics, Economic Society of South Africa, vol. 82(4), pages 518-530, December.
    4. Sylvanus Kwaku Afesorgbor, 2013. "Revisiting the Effectiveness of African Economic Integration. A Meta-Analytic Review and Comparative Estimation Methods," Economics Working Papers 2013-13, Department of Economics and Business Economics, Aarhus University.
    5. Ebo Turkson & Abena D. Oduro & Priscilla Twumasi Baffour & Peter Quartey, 2023. "Regional integration and non‐tariff barriers to Intra‐Sub‐Saharan Africa trade," The World Economy, Wiley Blackwell, vol. 46(2), pages 396-414, February.
    6. Afesorgbor, Sylvanus Kwaku & van Bergeijk, Peter A.G., 2011. "Multi-membership and effectiveness of regional trade agreements in Western and Southern Africa: a comparative study of ECOWAS and SADC," Proceedings of the German Development Economics Conference, Berlin 2011 1, Verein für Socialpolitik, Research Committee Development Economics.
    7. Festus Ebo Turkson, 2012. "Trade Agreements and Bilateral Trade in Sub-Saharan Africa: Estimating the Trade Effects of the EU-ACP PTA and RTAs," Discussion Papers 12/07, University of Nottingham, CREDIT.
    8. Lisa Borgatti, 2011. "Economic Integration in Sub-Saharan Africa," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 20, Edward Elgar Publishing.

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